Smart Buildings Market to Grow by USD 76.8 Billion (2025-2029), Rising Demand for Automation Enhances Business Outcomes, Report on How AI is Driving Market Transformation

NEW YORK, Jan. 31, 2025 /PRNewswire/ — Report with the AI impact on market trends – The global smart buildings market size is estimated to grow by USD 76.8 billion from 2025-2029, according to Technavio. The market is estimated to grow at a CAGR of almost 11.3% during the forecast period. Growing need for building automation to enhance business outcomes is driving market growth, with a trend towards increasing integration of iot with building automation software. However, challenges in integrating building automation software coupled with interoperability issues poses a challenge. Key market players include ABB Ltd, Advantech Co. Ltd., BuildingLogiX, Cisco Systems Inc., Delta Electronics Inc., Emerson Electric Co., Honeywell International Inc., International Business Machines Corp., Johnson Controls, L and T Technology Services Ltd., Legrand SA, Panasonic Holdings Corp., Robert Bosch GmbH, RTX Corp., Schneider Electric SE, Siemens AG, Smarteh d.o.o., Snap One LLC, Softdel System Pte. Ltd., and Switch Automation.

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Market Driver

The Smart Buildings Market is experiencing significant growth due to the integration of advanced technologies such as 5G, IoT, AI, and VR. These technologies enable building automation, energy efficiency, and resource management in both commercial and residential sectors. In commercial buildings, AI-enabled innovations like intelligent glass, smart thermostats, and energy-efficient structures reduce energy consumption and improve space utilization. In urban areas, smart cities are being developed with networked infrastructure for efficient waste management and secure environment. Home automation, including smart lighting systems and home security, is a growing trend in residential buildings. The integration of cloud computing and data analytics facilitates real-time monitoring and management of building premises. The commercial segment also benefits from AI-driven network and workforce management systems. 5G technology and IP-based solutions enhance network management, while blockchain ensures information security. Energy management, waste management, and fire safety are key concerns addressed by these technologies. Urban environments are becoming smarter with the integration of automated technologies like sensors, actuators, and microchips. The focus on environmental effects and resource management is driving the adoption of smart buildings in both residential and industrial sectors. 

Non-smart buildings rely on manual control, leading to high operational costs and lengthy lead times. Traditional building automation faces limitations due to complex wired or slow wireless connectivity. The Internet of Things (IoT) integration into building automation addresses these challenges, enabling advanced IP-based internet connections. This technology allows end-users to monitor multiple building systems via a central hub, driving demand for advanced building automation. IoT adoption, fueled by increasing internet penetration, presents a significant growth opportunity for the global smart buildings market, creating a new market niche for building automation software. 

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Market Challenges

• The Smart Buildings Market is experiencing significant growth due to the integration of advanced technologies like 5G, IoT enabled devices, AI, and VR. Commercial and residential building owners are investing in energy-efficient structures, intelligent glass, smart thermostats, and elevators to reduce greenhouse gas emissions and improve resource management. The use of AI, sensors, actuators, and microchips enables automated technologies for space utilization, energy management, network management, workforce management, and waste management. In urban areas, smart cities are being developed with secure environments using blockchain, information security, and smart lighting systems for energy conservation. Challenges include environmental effects, security concerns, and the integration of AI, IoT, and cloud computing for efficient building operations. Smart Homes and Intelligent Security Systems, including fire safety, video surveillance, access controls, theft detection, and intrusion detection, are also gaining popularity in the residential segment. The market includes various sub-segments like heating, ventilation, air conditioning, and network systems.
• Building automation systems in smart buildings involve integrating various equipment and appliances to enhance energy efficiency and optimize operations. The complexity increases with larger structures, requiring specialized technical skills to manage the software. Effective communication between hardware systems is crucial for efficient operation. Interfacing software ensures compatibility and configures devices on a single platform. Integrating legacy systems with new software can pose challenges, potentially leading to faulty installations and security vulnerabilities. Professionally managing these complexities is essential for successful smart building implementation.

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Segment Overview

This smart buildings market report extensively covers market segmentation by

• Product
• BMS
• HVAC
• Lighting Control
• Security And Access Control
• Others
• Component
• Software
• Hardware
• Services
• Geography
• North America
• Europe
• APAC
• South America
• Middle East And Africa

1.1 BMS- The Building Management Systems (BMS) segment is the largest and leading part of the global smart buildings market. Known alternatively as Building Automation Systems (BAS), BMS are vital components of intelligent buildings, integrating various standalone control and monitoring systems for efficient control. Comprised of software, servers, sensors, and major components like HVAC, lighting, and emergency systems, BMS monitor and manage devices collectively. The cost of implementing BMS ranges from USD2.50 to USD7.0 per square foot, making ROI a significant challenge. Europe and APAC are major contributors to the BMS market’s growth due to increasing industrialization, commercialization, and energy efficiency awareness. In the commercial sector, high-end residential buildings, and services sector, BMS adoption is anticipated due to the need to connect different control systems. Technology advancements, including IoT, analytics, and cloud computing, further fuel BMS adoption for effective monitoring, controlling, and operating building facilities. These factors will significantly boost the growth of the BMS segment in the global smart buildings market.

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Research Analysis

The Smart Buildings Market is experiencing significant growth due to the integration of advanced technologies such as 5G, IoT-enabled devices, AI, and VR. These technologies are transforming commercial and residential buildings into energy-efficient structures with intelligent systems for home automation and working from home. 5G technology enables real-time data transfer and communication between devices, enhancing the performance of AI-enabled innovations like energy conservation, waste management solutions, and data analytics. Cloud computing facilitates remote access and management of these systems, while smart lighting systems and intelligent security systems ensure energy efficiency and safety. Smart cities are also adopting these technologies to create interconnected infrastructure for efficient energy usage and improved living conditions. The market includes various sub-segments like smart thermostats, smart elevators, intelligent glass, and fire safety systems, all aimed at reducing greenhouse gas emissions and promoting sustainability.

Market Research Overview

The Smart Buildings Market is experiencing rapid growth due to the integration of advanced technologies such as 5G, IoT-enabled devices, AI, and VR. These technologies enable building automation, energy efficiency, and resource management in both commercial and residential buildings. In urban areas, smart buildings contribute to reducing greenhouse gas emissions and promoting sustainable urban environments. Cloud computing and data analytics play a crucial role in managing building premises, optimizing space utilization, and analyzing environmental effects. Home automation, including smart thermostats, intelligent glass, and smart elevators, enhances comfort and convenience for residents. Working from home and waste management solutions are also driving the demand for smart buildings. Energy management, network management, workforce management, and security concerns are addressed through automated technologies, sensors, actuators, and microchips. Building owners benefit from energy conservation, space utilization, and improved security. Smart cities are integrating smart buildings to create secure environments and manage urban resources efficiently. Blockchain technology ensures information security and transparency in energy trading and resource management. The market includes smart lighting systems, intelligent security systems, fire safety, video surveillance, access controls, theft detection, intrusion detection, and network systems. Heating, ventilation, and air conditioning systems are optimized for energy efficiency and occupant comfort. The Internet-of-Things (IoT) connects various building systems, enabling seamless integration and remote management.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Product
• BMS
• HVAC
• Lighting Control
• Security And Access Control
• Others
• Component
• Software
• Hardware
• Services
• Geography
• North America
• Europe
• APAC
• South America
• Middle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio’s report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio’s comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio